Short for Automated Clearing House, ACH is an intra-bank payment network used to send and receive funds electronically within the United States. Since launching in 1978, the ACH network has enjoyed exponential growth — largely due to convenience and cost.
Electronic payments sent through ACH are:
- Easier and faster to process than traditional paper-based checks
- Substantially cheaper than conventional credit card processing
Because of these advantages, current transactional volume over the ACH network exceeds $40 trillion annually.
However, many companies have difficulty qualifying for ACH processing because banks deem them “high-risk” merchants.
Businesses in this category include:
- Startups or those with insufficient credit history
- Companies incorporated overseas
- Those in adult content, gambling and e-cigarettes
- Businesses with a history of payment fraud or abuse
Depending on the risk classification of your business, you may be tempted to explore alternative payment solutions like offshore merchant accounts.
However, at Performance Card Service, we specialize in high-risk ACH processing for businesses that might not normally qualify for payments through the Automated Clearing House network. In addition to sending and receiving electronic checks, our ACH solutions enable your customers to use their debit and credit cards when making purchases.
The Benefits of High-Risk ACH Processing
If your business falls into one of the above “risk” categories, you can expect to pay slightly higher processing fees — no matter what payment solution you choose. Further, with high-risk ACH processing, there are additional expenses involved. Yet the benefits received make this payment method a worthwhile investment.
Below are just some of the advantages our high-risk clients enjoy:
1. ACH Processing Opens New Markets
Many Americans don’t have credit cards. Nearly 40 percent report never using personal, paper-based checks. By not offering the ability to pay using electronic checks, you’re missing out on a huge pool of potential customers.
2. ACH Processing Can Improve Cash Flow
ACH payments typically settle faster than those made with paper checks. This is especially true once you factor in the time required to:
- Send physical payments by post
- Process each check by hand
3. ACH Payments Are Cheaper to Process
Credit cards carry a range of fixed and percentage-based fees that can quickly eat into your profits. With paper-based checks, there are costs associated with materials, postage and time spent manually processing each payment. By some estimates, businesses lose more than $26 billion annually due to these hidden costs.
By contrast, electronic payments across the Automated Clearing House network carry consistently low, flat fees — even for high-risk ACH businesses.
4. ACH Processing Is More Secure
Whereas both credit cards and checks are prone to abuse, ACH processing requires establishing a direct link between the customer’s bank account and yours. As a result, ACH payments are less susceptible to fraud. You might discover that the number of chargebacks, refunds and disputes decreases, as well.
5. ACH Processing Simplifies Recurring Billing
There’s a reason so many employers use the ACH network for direct deposit. Because of speed, cost and convenience, this payment method is ideally suited for recurring expenses. When you enable high-risk ACH processing in your own business, your customers can continue buying from you with ease — month after month.
Is High-Risk ACH Processing Right for You?
If you’re a high-risk merchant looking for a faster, easier or more affordable way to generate sales, our electronic payment solutions may be ideal for your business.
To learn more about our unique approach to high-risk ACH processing, schedule a free consultation with us today.